Markets & Finance

Prudential Shuts Equity Research Group


Two hedge funds push TD Ameritrade to pursue a merger, and more stocks in the news Wednesday

From Standard & Poor's Equity ResearchPrudential Financial (PRU) announces it is discontinuing its institutional equity research, sales, and trading business known as Prudential Equity Group, effective immediately. Prudential Equity Group is dropping coverage of sectors and companies it covers.

TD Ameritrade (AMTD) says in an 8-K filing that it received a letter from two hedge funds notifying the company they have 8.4% stake in it and seek to acquire more. They also indicated they wish to see TD Ameritrade pursue a business combination with E*Trade Financial (ETFC) or Charles Schwab (SCHW).

Panera Bread (PNRA) cuts 3.5%-4.5% second-quarter system-wide same-store sales growth target to 1.5%-2.5%. It also notes it is experiencing margin pressures based on mix shift. It revises second-quarter EPS guidance to $0.38-$0.40.

Starent Networks (STAR) shares rose to $14.15 in its IPO of 10.5 million shares priced at $12 a piece.

Novastar Financial (NFI) rises further after the company announced yesterday that its NovaStar Mortgage unit securitized $1.4 billion of non-conforming mortgage assets.

Guess (GES) posts $0.38, vs. $0.23 a year ago, first-quarter EPS on a 42% revenue rise. It sees second-quarter EPS of $0.31-$0.33 on revenue of $335-$345 million. It raises fiscal year 2008 EPS guidance to $1.75-$1.80 from $1.65-$1.70 on revenue of $1.51-$1.56 billion.

Russ Berrie & Co. (RUS) says it has received an unsolicited non-binding proposal to acquire the company for $18 per share. It says its board determined this proposal undervalues Russ Berrie and does not provide sufficient basis for further consideration.

Bare Escentuals (BARE) shares fall on news the company sees second-quarter year-over-year sales growth in line with the first quarter, with the exception of Infomercial channel, which is expected to be flat relative to prior year. It sees $0.20-$0.22 second-quarter EPS, and continues to see 2007 EPS of $0.89-$0.94.

Volterra Semiconductor (VLTR) sees lower-than-expected second-quarter revenue of $18.5-$19.5 million, non-GAAP loss of $0.04-$0.07. It cites process defect with one of its vendors. CIBC World downgrades to sector perform from outperform.

Oxford Industries (OXM) sees fourth-quarter sales in the lower half of previously issued guidance of $285-$295 million; it now sees $1.00-$1.05 EPS from continuing operations (excluding items). It notes continued weakness in tailored clothing. It sees $0.46-$0.51 first-quarter EPS from continuing operations.

Macrovision (MVSN) announces organizational realignment; it will result in worldwide headcount cut of about 7%. It plans to take about $4.5 million restructuring charge in the second quarter. It sees 2007 non-GAAP EPS of $1.33-$1.43, ahead of previous view of $1.25-$1.35.

Altera (ALTR) reaffirms second-quarter quarter-to-quarter sales growth forecast of 1%-4%.

Tal International (TAL) retains Citigroup Global Markets Inc. as a financial advisor to assist Board in review of alternatives, including a possible sale, acquisition, merger, recapitalization, adjustment to dividend policy, among other things.

Zumiez (ZUMZ) posts 11.2% higher May comparable-store sales and 52% higher total sales.


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